Some thoughts on "affordable housing"

I have a couple of problems with a story in today's Chronicle about the city seeking "expert" opinions from community activists such as ACORN in order to fix Houston's "affordable housing" program.

I don't blame the reporter (Mike Snyder) as much as I blame conventional wisdom. Better editorial direction might have helped, but I'm not even sure about that.

Anyway, my first problem is with the term "affordable housing." What is "affordable housing"? Who defines it? What is the price range of it? What income level determines who gets it? How many taxpayer dollars are required to subsidize it?

I have lived in both Northern and Southern California and I can guarantee you that the vast majority of housing in Houston would be considered "affordable housing" in California.

My second problem is with something that is barely touched on in the story -- property taxes. Texas' very onerous property tax system probably does more to hurt lower-income families with home ownership than anything else. Snyder makes a passing mention of property taxes here:

In neighborhoods where redevelopment is driving up property values rapidly, protect residents from displacement through tax relief.

If I am reading that correctly, the suggestion is to shield lower-income families from skyrocketing property taxes. But that only masks the problem. We already give seniors a property tax exemption, and in Galveston County there is a new program that freezes property tax rates for seniors and disabled persons. Now we have a suggestion to provide property tax relief for lower-income homeowners. While I certainly understand the reasons for all these breaks, what it does is place more and more of the state tax burden on a shrinking group of citizens.

Most likely there will come a time when the property tax burden squeezes middle-income and higher-income homeowners to the point that they revolt. (This is a much fairer system of taxation.)

A similar situation had California teetering on the brink of bankruptcy recently. After years and years of narrowing the income tax burden to the wealthiest Californians, two things occurred: many wealthy Californians started fleeing the state thereby taking taxable income away from the state coffers, and California's economy tanked when the tech bubble burst. It's a cautionary tale for governments that continue to narrow the tax base.

Posted by Anne Linehan @ 06/22/05 01:39 PM | Print |

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